Saturday, May 05, 2007

CORRIDOR TO STRENGTHEN TAIWAN-PHILIPPINES ECONOMIC TIES: OFFICIAL

Taipei, May 5 (CNA) The Kaohsiung-Subic Bay-Clark economic corridor is going at full strength, and it seeks to strengthen economic relations between Taiwan and the Philippines, a Philippine official told the CNA in an interview Saturday.

By linking three economic and export process zones and allowing easier product and manpower movement, Taiwan and the Philippines will be able to build upon their already successful trade relations and create a win-win situation, said Armand Arreza, administrator and CEO of the Subic Bay Metropolitan Authority.

Arreza was a part of a Philippines delegation that visited Taiwan from May 2-5 to review the implementation of the economic corridor, an initiative submitted by former Minister of Economic Affairs Ho Mei-yueh in 2005. The Memorandum of Agreement was signed and went into effect May 2006.

The Philippines and Taiwan have been enjoying a long and harmonious trade relationship, Arreza said, adding that there are more than 45 Taiwanese locators in the Subic Bay Freeport Zone which account for more than 80 percent of the zone's export value.

The establishment of the corridor is expected to resolve some issues that have concerned Taiwanese companies and make Subic Bay attractive again, he said.

The Clark Special Economic Zone, a former U.S. Air Force base located just north of Manila, will also become attractive for Taiwanese companies, especially following Philippine President Gloria Macapagal-Arroyo's announcement of a US$1 billion investment plan by Texas Instruments earlier this week, Clark Development Corp. Director Benigno Ricafort said.

Arreza also clarified local news reports on Taiwanese businesses' "exodus" from Subic Bay, stressing that the freeport always welcomes Taiwanese companies and that it is "delivering more and more incentives to Taiwanese companies."

"This is an international zone for everyone. Companies from South Korea, China and the United States have seen the opportunities [ for investment.] It's only a matter of time before Taiwan once again recognizes the opportunities," Arreza said.

However, he admitted that some Taiwanese companies have moved out of Subic Bay, explaining that "it's just a part of the business" since companies are always looking for cheaper labor.

"Today, they're moving to Vietnam, tomorrow they will be in Cambodia. And in the future, they will probably be in Africa, " he said.

"But we want to work with Taiwan, and we are always looking to adjust, " he reiterated, saying that qualified engineers are in short supply, and that's Taiwan's strength. If Taiwan takes advantage of the Philippine labor force and helps develop its talent and creativity, this will be beneficial for both sides, he said.

Subic Bay and Clark are working hard to improve infrastructure, including building expressways, international airports and power supply networks, Ricafort added.

Taiwan's Ministry of Economic Affairs (MOEA) announced in a press release that the Philippines has agreed to grant Taiwanese IC makers tax-free treatment for a period of between 6-8 years, as well as 90-day visas and work permits, while lowering electricity costs for Taiwanese locators. The two sides will also collaborate to push for direct flights between Taipei/Kaohsiung and Subic Bay/Clark and to integrate tourism into the corridor in the future.

According to MOEA tallies, bilateral trade between Taiwan and the Philippines reached US$7.2 billion for 2006, with Taiwan ranking as the Philippines' sixth largest trading partner.